Mumbai: Some low-fare airlines are shedding their no-frills image to attract more business fliers, a segment they see sustaining their operations over the long haul.
Corporate travellers account for more than 70% of passengers flying full-service airlines such as Jet Airways (India) Ltd and Kingfisher Airlines Ltd, the country’s two largest private carriers. These airlines enter into deals with companies to fly their employees, offering special discounts and packages in exchange for assured volumes.
On the other hand, low-fare, economy class airlines see only 50% of their revenues from business travellers, a segment that can be crucial for them, especially during the current trough in aviation.
Carriers such as IndiGo, run by InterGlobe Aviation Pvt. Ltd, SpiceJet Ltd and JetLite (India) Ltd, the low-fare subsidiary of Jet Airways, have started offering free food on board for corporate fliers, and waiving cancellation and rescheduling charges.
Kingfisher Airlines is also planning special deals with companies that have employees frequently flying on its no-frills airline Kingfisher Red, previously Air Deccan.
“Domestic airlines are doing this to make corporate travellers feel special,” said Mark D. Martin, senior adviser (advisory services) at audit and consultancy firm KPMG India Pvt. Ltd. “Corporate travellers account for up to 70% of the total flying population during peak season. During the lean season, especially holidays, the percentage of corporate travellers usually declines to 50%.”
Such changes, however, could be damaging, because it could put off other passengers. Companies should instead prefer volume ticket deals that would lower travel costs, on-time performance assurance, express check-in and telephone check-in facilities, and most importantly, deals with budget hotels, Martin added.
Bruce Ashby, chief executive officer of IndiGo, said his airline offers companies all-inclusive fares and discounts based on the commitment of volumes.
“Convenient reporting and travel tracking features for bookings (are) made under the corporate programme so that travel can be easily monitored at the corporate level, rather than requiring individuals to submit expense forms for each trip,” he said.
Following the popularity of prepaid meals for business fliers, IndiGo now plans to allow other customers to prepay for meals at the time of booking itself. “As such, corporate travellers who fly Kingfisher Red can benefit from the special pricing packages that are offered to corporate clients,” said Hitesh Patel, executive vice-president at Kingfisher Airlines. But the airline is not considering waiving rescheduling or cancellation charges for now, he said.
Kingfisher Airlines has already extended benefits of its frequent flyer programme to those flying Kingfisher Red, which mostly sees business passengers from small and medium-size companies. “Our estimate is that close to 50% of the travellers flying on Kingfisher Red class belong to this segment,” Patel said.
SpiceJet says on its website that its corporate fares are pre-loaded with zero charges for any rescheduling and cancellation along with a complimentary snack on board.